From Bloomberg, September 1:
India’s Reliance Industries Ltd. stands to benefit the most from China’s push to curb overcapacity from a gamut of industries, and the conglomerate’s own efforts to streamline its businesses, according to Morgan Stanley.
Billionaire Mukesh Ambani’s company “is the largest beneficiary of China’s anti-involution focus across energy and solar supply chains,” analysts including Mayank Maheshwari wrote in a note dated Sept. 1. “Reliance is going through self-anti-involution in consumer businesses and benefiting from China’s anti-involution drive in multiple ways – both of which are not priced in.”
The term ‘involution’ in China refers to cutthroat competition with little payoff. ‘Anti-involution’ describes moves by companies and policymakers to counter that trend, a shift that has supported equities as Beijing battles deflation.
Reliance is building out a fully integrated solar supply chain in India at a time when overcapacity is forcing China to rationalize its polysilicon production. That could cut Reliance’s energy costs by as much as 40% by 2030 and lift new-energy earnings contributions to 13% by 2027, according to Morgan Stanley....
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